Article

Next 12 months a crucial test for British exporters

11 Dec 2015

Commenting on the latest trade figures which showed the UK’s trade deficit widening to £4.1 billion in October 2015 – up from £3.1 billion in September, Allie Renison, Head of Europe and Trade policy said:

“As ever with these monthly trade statistics, is important to look at the numbers behind the headlines. The trade deficit widened in no small part because companies and households bought more from overseas – pushing up imports. This is no cause for concern and robust demand at home is a sign of confidence in the British economy. It is also encouraging that businesses continue to invest in machinery and equipment from abroad. This may increase our trade deficit, but is clearly a sign that companies are ramping up production.

“The next twelve months will be the crucial test of whether Britain can make a more significant dent in our gaping trade deficit. With the ECB extending quantitative easing, the continued depreciation of the euro and turbulence in developing markets, UK exporters will be under sustained pressure. Manufacturers, in particular, will have a tough time competing against continental firms. While Britain’s impressive trade surplus in services will offset this to some extent, we cannot be overly reliant on our world-leading services to fly the flag for British exports.

“At a time when British companies face so many hurdles to increase their export performance, it is imperative that protectionist barriers are stripped away. Ensuring that trade is as free and easy as possible is the surest way to increase the value of the goods and services that Britain sells overseas. The conclusion of the free trade deal between the EU and Vietnam is an important development on this front. The EU must focus on securing as many far-reaching trade deals with high-growth countries as it can to help European firms access new markets around the world.”